Vanuatu

Vanuatu's regulations on corporate taxation and any benefits for foreign investment

1. Tax system and system
Vanuatu has introduced a series of legal provisions, including the Export Tariff Act, Import Tariff Act, and Value Added Tax Act. The types of taxes and tax rates are formulated and levied in accordance with the laws enacted.
Value added tax is paid directly at the time of transaction, and import and export tariffs are paid upon application.

2 Main Taxes and Tax Rates
The main types of taxes in Vanuatu include trade tax, value-added tax, and stamp duty. Trade taxes are the main source of financial revenue for Vanuatu. At present, the trade tax rate table contains many different tax rates, which are complex and inconsistent. The government is reviewing the tax rates to align them with Vanuatu's obligations under the Melanesian Vanguard Group and the Pacific Island Countries Trade Agreement.

The Vanuatu government began levying value-added tax in 1998 to replace the original sales tax and ad valorem business license fees, thereby reducing the government's excessive reliance on international trade for fiscal revenue. The value-added tax rate is 15%, and value-added tax revenue accounts for about one-third of the government's fiscal revenue. The Vanuatu Value Added Tax Law stipulates that all enterprises or individuals engaged in so-called "value-added tax payment activities" in Vanuatu with an annual turnover exceeding 4 million watts, or expected to exceed 4 million watts in the next 12 months, must register for value-added tax and pay value-added tax. "Value added tax payment behavior" refers to the behavior of engaging in the sale of goods or services for a long time with the goal of making profits. Enterprises that register for value-added tax will be eligible to enjoy the tax deductible benefits for related business expenses. If conducting business activities in the form of branch offices, the taxable turnover should be the sum of the turnover of each branch office, and cannot be calculated as a single branch office. Vanuatu does not levy corporate and personal income tax, corporate tax, property tax, gift tax, capital gains tax, and other taxes. All imported goods are subject to import taxes to increase fiscal revenue, protect domestic manufacturing, and encourage substitution for imports.

4 Industry Encouragement Policies
The government of Vanuatu focuses on encouraging foreign investment in tourism, agriculture, fishing, and service industries, especially in labor-intensive industries that use Vanuatu's domestic products to replace imports. In order to create a suitable investment environment and encourage foreign investment in the private sector, the Vanuatu government passed the Foreign Investment Law in 1998 and established the Foreign Investment Committee, now known as the Vanuatu Investment Promotion Agency (VIPA), in accordance with the law. VIPA is responsible for promoting foreign investment and formulating relevant regulations to encourage foreign investment through the reduction of trade taxes. The Investment Promotion Bureau provides assistance to foreign investors investing in Vanuatu and strives to meet the information needs of interested investors, helping them establish businesses in Vanuatu through legal procedures. The government supports and encourages the development of export-oriented, export-oriented, and import substitution investments, as well as promotes the development of industries and products that are conducive to the development of diversified economies and improve the living conditions of rural areas on other islands.

Large scale investment projects refer to investment projects that have been in operation since January 2005 and have a total capital of over 1 billion watts (approximately 9.09 million US dollars). The specific preferential policies are as follows:
(1) Exemption from stamp duty and registration fees for land and buildings in the early stages of the project;
(2) Exemption from import tariffs and value-added tax on machinery, equipment, and materials imported for project construction (excluding vehicles and ships);
(3) For casino projects, gambling can be waived in the first year of operation (calculated from the date of operation)
Field tax;
(4) There is no limit on the number of foreign employees in the first three years of project operation;
(5) For the market development of tourism projects (subject to the Vanuatu Tourism Law).

5 Regional Encouragement Policies
The Vanuatu government does not have any special area investment incentive policies.